Transitional Pension

Lyn may commence a transitional pension up until the age of 60 and withdraw the required $80,000 per annum. The taxable component of $40,000 would be taxed at her marginal tax rates with a 15% tax offset.

Lump Sum Withdrawal

Alternatively, Lyn may elect to withdraw $80,000 per year up until age of 60 as a lump sum. Lyn has a taxable lump sum low rate lifetime limit of $185,000. As 50% of Lyn’s balance is tax free, her taxable lifetime limit would reduce by $40,000 p.a.

The tax effective option for Lyn would be lump sum withdrawal as it is entirely tax free.*